From Supply Chains to Sandpits: Why ESG Matters in the Early Years Sector

Context: Why ESG Is Rising Up the Agenda

I joined an audience of charities and investors at the ESG Imperative Conference, organised by Charity Finance, to deepen my understanding of the implications of emerging ESG (Environmental, Social, and Governance) expectations for the sector. Sustainability, all three pillars is becoming the lifeblood of LEYF, woven through our governance, leadership, operations and pedagogy and, as a recipient of the King’s Award for Enterprise and Sustainability, we believe we have a duty to find out more in this fast-changing space and share what we learn.

This is not just a business issue. This is an Early Years issue. The children in our nurseries are part of these global systems, whether we acknowledge it or not.

The Regulatory Landscape Shaping ESG

I wanted to learn more about forthcoming changes, including Charities SORP 26, the refreshed CC15 guidance on charity investment from the Charity Commission, and the wider legislative framework shaping organisational accountability.

This includes the Modern Slavery Act 2015, which requires organisations above the relevant threshold to publish an annual transparency statement on the steps they are taking to identify and address modern slavery risks in their operations and supply chains. These statements are expected to be entity-specific, risk-based and focused on due diligence, governance effectiveness and senior leadership accountability, rather than being purely declarative.

This sits alongside directors’ duties under Section 172 of the Companies Act 2006, which require consideration of stakeholders, long-term consequences and the organisation’s impact on the community and environment. In practice, this is increasingly interpreted as encompassing oversight of human rights risks within supply chains, investment decisions and major transactions.

Taken together, these developments signal a shift from voluntary ethical positioning towards structured, board-level responsibility for ESG, supply chain transparency and impact-informed decision-making.

Modern Slavery: The Hidden Reality Behind Supply Chains

So, here is my take on what I learned and how it might help those of us running charities and social enterprises.

Much of the debate started with procurement, resources and suppliers, but then Andrew Wallis from Unseen UK – a charity addressing modern slavery – spoke and put a completely different perspective on the subject. He began with three deceptively simple questions:

· Do you eat food?
· Do you wear clothes?
· Do you use electronics?

The obvious answer to all three is yes. This means that you are likely connected to as many as 40 individuals in situations of modern slavery within global supply chains. This stark message reframes modern slavery from something distant to something embedded in daily life.

The numbers really shocked me. He defined modern slavery to include servitude, human trafficking and forced labour. There are 50 million people in modern slavery, including 27 million in forced labour. No doubt this will include children. It is an industry making a lot of people rich and generating trillions globally.

So do your bit. Check your supply chain. Ask questions. Make people aware. Every civilisation has had slavery. This is our slavery.

Turning Sustainability Into a Moral Purpose

The debate around the tables raised two key issues that we have been addressing at LEYF. Firstly, how do we drive mindset change so staff and supporters become sustainability-informed? How do we create an emotional lever for adults to want to change? In the Early Years, protecting our children – their futures, their rights and their sense of justice – can be that lever, turning sustainability from a reporting requirement into a moral purpose.

When designing your strategy, or refreshing it, begin with your timeline and a set of baseline measures and then return to them so you can see what you have done. Sometimes we are so focused on the outcome that we forget to celebrate the journey we have travelled.

Double Materiality and Measuring What Matters

The Wellcome Trust encouraged us to pay attention to double materiality by asking stakeholders what matters most and then judging those issues by two measures: the impact the organisation has, and the level of concern stakeholders attach to them, before assessing their scale and risk.

Keep your reporting process informed, pragmatic, collaborative, improvement-focused, rooted in continuous learning and focused on measurable long-term impact.

Compassion, Inequality and the Case for Systemic Change

The day closed with a panel chaired by Peter Holbrook from Social Enterprise UK on the idea that compassion is under siege and it stayed with me long after the conference ended. It had a touch of Bob Dylan’s The Times They’re Changing about it: a sense that the ground is shifting, and we are being asked which side of the line we stand on.

The conversation could have gone further, but its central message was clear. Poverty sits at the heart of so much of the division and dissent we are currently experiencing and, if we are serious about ESG, impact and social value, piecemeal initiatives will not be enough. We need systemic change.

The image that lingered was that of a mosaic: each of us a small piece, meaningful only because we are part of something larger, not lone actors trying to carry the weight on our own. There was a reminder to revisit The Spirit Level, to re-engage with the evidence about inequality, and a call to action through the idea of “A Million Acts of Hope”.

What resonated most for me was Peter quoting my own definition of compassion, not as a feeling, but as a duty to act. Empathy, sympathy and kindness matter, but on their own they are incomplete. Compassion is what turns them into movement. Without it, nothing changes.